USA - Opinion:

Geothermal Stocks Warming Up (forbes.com)

El Tatio Geysers Chile

After a couple years of chilly investor sentiment, geothermal stocks are starting to warm up. The sector has been so beaten down that the small exploration and production players seem to have lost what little following they had, and so recent good news has gone mostly unnoticed.

It’s hard to generalize from one geothermal company to another. Each geothermal project is unique, not only because of the local electricity markets and legal structures, but also because of the idiosyncrasies of each project’s geology and chemistry.

Geothermal developer stocks have remained at beaten-down levels for over a year now, despite the companies making significant progress on their projects. While geothermal development is a much riskier business than more predictable development of other types of renewables, all of these developers are trading at a fraction of book value, which more than compensates for the risks involved, especially when held as part of a diversified portfolio.

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